Good morning. I welcome representatives from the Argyll and Clyde health care system to the meeting. I am sorry that we are missing David Sillito, who has decided to opt for the dentist's chair rather than to face the Health and Community Care Committee. Let us hope that the idea does not spread and that other witnesses do not see that as a way out of appearing before the committee.
Thank you for the opportunity to come and talk to the committee. I will outline briefly the process that we use in Argyll and Clyde Health Board. The process is unique to us—other health boards use different processes—but it might help to focus the committee's questions. The resource allocation process is not a one-off—it is a cycle over twelve months. We would like to think that this year we have a process that is more open and transparent than that which we have used previously. Each year we try to put in place something better than the year before, although there are always issues on which we can improve.
You have helpfully answered many questions that I wanted to ask about the process. Perhaps I could dig a little deeper. What local discretion is possible, given that £25 million of new money has been allocated for 2002-03, most of which will be used for inflationary pay and price increases?
There is an element of local discretion. However, Shona Robison is right to say that although the money is called new money it is already earmarked to meet various demands before it hits the desk—there are unavoidable commitments. Part of the financial planning process is to identify how to mitigate some of the problems. If there is a demand—as there is—for a large sum to be paid for junior doctors' hours, we must consider how changes in rotas, for example, might reduce that demand. Some things just come in and out and we have no choice about them. By the time we get the trickle-down effect, it does not feel as though there is much local discretion. By the time the money has been top-sliced at the Scottish Executive for recombinant factor VIII or IX and so on—and top-sliced at various other points along the way—it does not feel as though there is a lot left at the bottom of the pile.
Confidence that future moneys will come in allows us to adjust timing on the issues. There are significant pressures of which everybody is aware, such as junior doctors' hours. As a health system, we will receive a 5.5 per cent increase in funding this year. However, with the confidence that future moneys will come in, we are able to plan for developments and to address issues in-year; we can start some of the developments a bit later, knowing that the money will come through the following year. Some developments might start towards the latter end of the year, rather than during the early part of the year.
You talked about the public involvement and the interest groups that are involved in the process. Are those people surprised when they find out the levels of resources that are being discussed in relation to the priorities? Do you find that they assume that there is a global figure and that they are surprised that, when the money is whittled down, there is not much flexibility?
Interest groups find it quite difficult to grasp the large amounts that are involved. For instance, Argyll and Clyde Health Board deals with £390 million, of which a great amount is already committed on a year-to-year basis before it comes in. It is hard for interest groups to get a handle on what we mean when we tell them, for instance, how much discretion there is at local level in relation to £25 million of new money. Most interest groups are focused on their specific area and they want investment in those areas. The difficulty that we face is in engaging the public in strategic decision making.
Can the interest groups in local areas affect the decision-making process? Have changes been made in response to what they have been lobbying for?
Public involvement only works at a level below the local authority level, because people understand the spend on their local hospital and their community services. It is difficult for Argyll and Clyde Health Board to have a sense of community because it encompasses, for example, the deprived population in Inverclyde and the rural population of Argyll and Bute. Only at the level of, for example, north Argyll or Inverclyde do people care about services. That is where local health care co-operatives offer added value. The LHCC best practice report shows that the vast majority of LHCCs involve the public. The question is whether, once we have listened to the public's priorities, we are able to change the health system's direction. That is the challenge that we face.
I will give a specific practical example of a case in which public involvement has clearly influenced the direction in which the local services have been delivered daily. Renfrewshire and Inverclyde Primary Care NHS Trust has made the relatives and carers of patients who have learning difficulties in Merchiston hospital an integral part of the group that is considering the types of services that can be put in place as the hospital retracts. That group is also considering the level of support and provision that can be made available to support the sons, daughters, brothers and sisters of those people, as they move into the community. That has meant that we have slowed the programme down a little to enable people to have more influence over placement of their relatives.
Over the past year, there has been quite a change in attitude in relation to public involvement. From a time when consultation used often to be done after the process, we have moved to a different situation, as is illustrated by the on-going service developments in Dunoon. We are starting with a blank page and there are no project groups and so on. We are involving the public, patients, users of services, local clinicians and so on to shape how we begin the process. That is a fundamental change and we are dealing with new concepts and an exciting agenda. As Mr Martin said, the process might be slower, but it will be much more effective in the long term.
The committee received from Oban a petition—that had more than 9,000 signatures—on the threatened closure of the Nelson ward in Lorne and Islands district general hospital. That petition did not highlight wonderful consultation—people had no idea what was going on. A couple of weeks ago I received a paper on the closure of the Nelson ward, from which it was not crystal clear that some patients would go into the community and some would go into the Malcie Fleming ward. On the eve of a general election, I can see that many elderly people could be worried about the proposals.
I am not convinced that that has much to do with the budget that we are meant to be discussing. The question should be about the consultation that is involved in that kind of closure, rather than the specifics, if I may guide the witnesses in that manner.
We have rescued the situation in north Argyll. I agree that it was handled poorly at the beginning, but with Lomond and Argyll Primary Care NHS Trust, the local authority social work department, the local hospital and the public working together, we have set up a local forum. People have been much more involved in decisions and the reasoning behind them. Once they get an understanding of the pressures on the service—they want to see better community-based services—they are much more supportive. We have recovered from the days of the petition to which Mary Scanlon referred and the marches on the hospital.
The situation was badly handled in the early stages.
Can I move back to the budget? Your initial remarks were good—they were about the component parts of the process that you go through in deciding how to prioritise new money. Does that mean that the other £390 million—or whatever it is—that you already have sitting there goes unchallenged? How do you examine that again during the HIP process?
One of the difficulties is that a huge amount of the focus goes on the new money—it is the 80:20 rule—because people see an opportunity to gain something out of it, but they see the large bulk of the money as merely flowing through. We do not feel that that is the case, because that large sum of money must be re-examined every year.
There is a process that I describe as needs-to-resource profiling. Judith Illsley touched on the annual report by the director of public health. This is the first year in which that report has been built around identification of the public health needs of localities. As we get better at that science, we are identifying the true needs of localities—with good and robust public involvement—and we are getting better at analysing the spend. We are beginning to match the two. We must be careful, as was touched on, not to fall into the trap of looking only at how we invest any additional uplifts in our budget. We must take a whole-system approach.
Many of my questions about cost pressures have been answered. Clearly, you recognise those pressures and the limitations that they impose. Is it impossible to balance national priorities, local priorities, staff aspirations, interest groups and the public? I presume that in an ideal world, you would want fewer constraints. How could that be done manageably?
We need to recognise that, given the demographics and deprivation profile of Argyll and Clyde Health Board's area, many of our local priorities are the national priorities. Forty one per cent of deaths in the area are the result of coronary artery disease or stroke. Those are national, Scottish Executive health priorities and we need to do something about them to improve that statistic. I am not trying to dampen the housing market with this statement, but somebody who lives in the Argyll and Clyde Health Board area is 10 per cent more likely to have a stroke, and 7 per cent more likely to have a heart attack, than somebody who lives anywhere else in Scotland.
The general issue of planning processes is important. Those processes go from the bottom up and from the top down, as the classic expression goes. The reality is that the LHCC planning processes match top-down planning quite well. As Paul Martin emphasised, the priorities that come from the LHCC are very similar to the national priorities—Erik Jespersen might want to comment on that. There might be additional local pressures.
That takes us on sweetly to our next line of questioning, so perhaps Dr Jespersen can say what he was about to say after he has heard Mary Scanlon's next round of questions.
My question is specifically for Dr Jespersen. Given that you have £25 million and that we are looking for best health practice, from your experience, what difference will the new money make at LHCC level? Is greater devolution of budgets to LHCC level the way to address local priorities? Could you mention commissioning in your answer? General practitioners in England and Wales have commissioning powers and I understand that, in Wales, the LHCCs are funded directly by the National Assembly for Wales.
Last year, James Dunbar came to speak to the committee about the budget process. He emphasised the role of primary care and prevention. I will not repeat much of that.
I feel like a teacher now, because I want you to answer my specific questions about commissioning in Scotland and direct funding.
As some committee members may know, my background is that I was a GP fundholder. I managed a budget of £2.5 million for a population of 10,000. By investing in our local services and our primary care services, we managed to reinvest or change the way that that money was used. I admit that I imagined I would be able to spread what I had done for one practice to the 30 practices in the local health care co-operative. However, the opportunities to do that have not existed. The lack of commissioning in Scotland is a drawback and means that we have no mechanism for managing the rise in demand for acute services. Primary care and acute services would benefit jointly from some mechanism to address that interface.
Does the funding process encourage initiatives by clinical directors such as you?
If Mary Scanlon means that some things are ring-fenced, I would say that we have enough flexibility. Our trust devolves decisions about the whole of our hospital and community health services and GMS budgets down to the LHCC. That is not happening all over Scotland but, where it is, it encourages us to address our local priorities with quite a lot of freedom.
You mentioned the example of the Welsh health authorities. Are you saying that a lot of money in Scotland is spent on bureaucracies, such as health authorities, and that it may be better directed elsewhere?
It would be wrong to plan to have management savings. Sometimes the health service is undermanaged but overadministered. Taking out layers might not save a lot of money; it might just put the managers in places where they might be able to effect more change.
Dr Jespersen has made the point, but I want to ensure that the committee understands that the hospital and community health services budget in the primary care trust is already devolved to the LHCC. When Dr Jespersen talked about commissioning, he was talking not about community services, for which he is already operationally responsible, but about acute services.
Yes.
I want to add an observation. Many of the primary care trusts in England have relatively small commissioning budgets. The committee might want to be aware of the potential to destabilise some large services. It is not my job to say what is right or wrong, but that issue needs to be considered along with the benefits.
I am interested in the devolution of budgets, as that is fundamental. The figure that Dr Jespersen gave us was 3.1 per cent. On a 5.5 per cent uplift, how do the LHCCs get into the share of the remaining 2.4 per cent? Is that devolved? We have heard about the complex process that is involved in managing those budgets, but if the 2.4 per cent is taken with the managed clinical network concept and with the shift from secondary to primary care, the reduction in acute beds and the increased turnover—and the resulting increased pressures on primary care—what is he getting for that?
We must mention again that the 5.5 per cent uplift from Argyll and Clyde Health Board creates a difficult situation; the board is an Arbuthnott loser. The degree of deprivation and rurality that exists in the Argyll and Clyde area suggests that there is something wrong with the formula.
The total amount of money that comes into Argyll and Clyde Health Board is devolved through the process that the committee has heard about and is not retained at health board level.
We have been trying to encourage both the LHCCs in the trust not to consider the GMS budget in isolation, but to consider the total money that they control. They are well aware of that. If one budget is a bit limited, we do not restrict the Argyll and Clyde Health Board budget to purely ACHB funding if the service benefits from other developments. If we are considering coronary heart disease or developments in the localities, the LHCCs will come up with the best way to deal with the issue. If that happens to be development in the GMS budget, so be it. We do not try to restrict between budgets.
Various people—including the British Medical Association and the committee—responded to the first Arbuthnott report by saying that no recognition had been taken of the 26 inhabited islands in Argyll and Bute.
One example is the Kintyre peninsula, which is not an island geographically, but is an island when it comes to the reality of providing services. The peninsula has a population of up to 8,000 people who are, in effect, three hours away from Glasgow or from a district hospital. The peninsula should be treated as an island, but the figures do not treat it as such. It is treated as a rural area—that is one disadvantage in the Argyll area.
I will move on to accountability up the way. We have looked at accountability down the way—you have described that in great detail.
We are slightly hampered, in that only Mr Bews has attended an accountability review. The rest of us do not go—we do the preparatory work beforehand.
Should you go?
That is an interesting question.
That is what I am here for.
The one element that I feel is missing at board level in Argyll and Clyde, among the three trusts and the health board, is that the director of public health for Argyll and Clyde Health Board should attend the reviews. Currently, the health board chairman and the trust chief executives attend. If the director of public health were to attend, that would provide the health element, as opposed to the clinical element, and perhaps we need that extra dimension to help focus on health, as opposed to health care. That would be my plea; I do not know whether my colleagues agree. That would give a different slant to considering overall accountability for health, rather than just for the delivery of services.
That was neatly sidestepped.
The actual accountability review—when we meet representatives of the Executive—is only one aspect of the whole accountability process. As health service deliverers, we are accountable to Parliament—there is no question about that. That is firmly understood by people in the service.
Is your health improvement plan subject to discussion with the Executive? I am aware that you have to submit it.
Yes.
Are you monitored against specific targets? I am referring not just to financial targets, but to health or health management targets.
We are expected to meet a whole set of national targets for improvements in health. Those targets cover morbidity and mortality in relation to cancer, coronary heart disease and stroke. They cover a whole range of other things including teenage pregnancies, low-birth-weight babies and dental health. Some of the targets are, one could say, picked out for the accountability review process, which covers a range of targets. They might relate to the financial side, to clinical outcomes, to the efficiency with which we deliver services, to access or to waiting times. They relate to a raft of things.
You talked about the way in which you involve the public when you work on your strategies. You indicated that one of the ways in which you were accountable to the public of Argyll and Clyde was through your annual meetings. Are you accountable in other ways, which you have not mentioned, to the people that you serve in Argyll and Clyde?
One main theme in that question was whether the process aims to hold to account the defined accountable officers or the system. Margaret Jamieson touched on holding the system to account, which requires a different approach. That is what the performance assessment framework, which has been developed through the health department, aims to do. I understand that the framework aims to produce real evidence through a self-awareness approach.
Will that cement a corporate accountability approach? The committee is not looking to blame individuals—we want to move away from the blame culture. If corporate accountability flows through the process, the spin-off is that the staff, as well as the public, will buy into the system.
The new structure for the unified arrangements, as defined in the health plan, sets out clearly the template that is designed to support that approach. The proposal is that the local authority employee director and the conveners of social work will be representatives on the unified board. Further clarity is required. With clinical representation on the unified board, a wider system is being created for both strategic involvement and accountability in governance.
An area of concern for the committee, which emerged as we questioned previous witnesses, is that the spending plans in the budget do not appear to be directly linked to the NHS plan, which was published at the end of last year. What is the correlation between the budget, as it is laid out, and the NHS plan?
The timing was difficult. The plan, which was produced at the end of last year, is an enormous document that contains a huge amount of information. It was out of sync with the process that we had embarked on and the targets for completion that had been set by the Scottish Executive.
At the accountability review—at which I was the only one of the four of us who was present—we were remitted to produce an action plan by the end of June. That is under way. Judith Illsley is right about the timing, but the health plan must be regarded as a continuing, and accelerating, process. There is a heck of a lot in the plan. We have to look at the specific targets for this year, add targets that we think we can achieve in the longer term, and produce an action plan. We will be doing that for the whole system and as individual trusts.
I accept your point that there is a definite correlation between local plans and the NHS plan, but are the budgetary proposals linked to the health plan? Can you deliver on the issues in the health plan with the budget as it is at the moment?
That is the $64,000 question.
And the only answer is that it would be very difficult to do so. However, that does not mean that we will not attempt it. It would be wrong of the Scottish Executive to decide to give lots of pocketed, ring-fenced money to allow the ticking-off of the actions in the health plan. There needs to be a balance between central decision making and local devolved decision making. Getting that balance right is extremely difficult for anyone.
We should not regard the health plan as being delivered only by the NHS. To be delivered, the health plan demands partnership working at local level. Much as we need to apply rigour—as the committee is rightly doing—to the allocation of budgets through the health system, equally we need to apply rigour to the allocation of budgets through the local authority system. The challenge is to identify where the two systems can work in partnership to get the best value for local money. That should be based not only on locality health planning, but on integrated community planning in which robust locality plans reflect the needs of the communities. We will not be able to deal with some of the health issues that have been mentioned unless we are also dealing with unemployment, housing and access to leisure. Problems in those areas are all impediments to improving health care.
I want to follow up on the point that Janis Hughes made. How do you fund a proposal in an action point in the national plan that has a cost implication but for which no money is coming to you from the Scottish Executive?
That is part of our prioritisation process. We look at all the demands that we face and all the resources that are available. To a greater or lesser extent, things can be programmed in according to how much money is available. It is not an easy process. Of course, we still have £390 million of existing resources and we also have opportunities for joint commissioning with local authorities, whereby we might get better use of the existing moneys by pooling and applying them.
Are you saying that, in terms of prioritisation, there may be elements of the national health plan that cannot be met because of resource issues?
We have not been through the process of putting sums of money next to each of the requirements in the plan. That is something that we will be doing as part of the action plan. Then we will get an idea of whether we require new moneys or whether we feel that we can do it within an existing base budget. If we require new money, we will need to decide where that stacks up and how it can be introduced over a period of time. If the question is whether the health plan will cost us money and whether we can afford it, the answer is that, at the moment, we do not know.
It is worth adding that a lot of the priorities in the health plan are the existing priorities. I therefore do not see a conflict there; I see a matching. As Judith Illsley said, the action plan will identify specifics much more rigorously, which is what I think you are after, but we do not have that information at the moment. However, we will have that sort of rigour within the next months to six weeks.
We are interested in the possibility of health boards informing us at some stage of how much they spend on various major diseases, such as cancer, heart disease, diabetes and mental illness. It might be difficult to work out, but it cannot be impossible. Do you think that that would be technically possible in an area such as yours? Do you think that that would be useful in comparing what happens in Argyll and Clyde Health Board area with what happens in other health board areas?
It is possible to identify those figures for certain groupings, such as mental health, learning disabilities and the elderly, partly because those are the areas in which we are entering into joint commissioning with local authorities. Each side is required to identify what they are putting into the joint commissioning pot, so to speak. Having said that, the picture is not complete. We can probably identify what we spend in hospitals on mental health and what we spend on community mental health. However, the amount of money that we spend on mental health in primary care, for example, is not separately identified, and it might be extremely difficult to pull that out.
So the proposal may not be cost-effective. I will move on to postcode medicine, which was referred to in relation to MS-trained nurses. Does your area have any chronic pain clinics?
What has that to do with the budget?
It relates to the budget because there are proportionately more patients for such clinics than for heart disease and cancer treatment together. Richard Simpson referred to a gap in MS-trained nurses; chronic pain clinics are another gap area. Am I wrong in thinking that there are no MS-trained nurses in Argyll and Clyde and that there is no specialist chronic pain service in the area?
There is a chronic pain clinic in Inverclyde, but most of our patients go to the Western general or the Southern general in Glasgow, where they have access to clinics.
Those people in extreme pain would have a very long journey.
It is difficult to provide such services throughout remote Argyll and Bute. I agree with you that it is difficult to provide outreach specialist services.
Please make your final point, Dorothy-Grace, as I want to let Margaret Jamieson ask some questions and we are already over time.
I ask the witnesses to try to answer the next question with specifics. How much of the £25 million of new money do you estimate, even roughly, is in your hands for improvements in health care or new provision, leaving aside the considerable sum for wage increases, inflation and other matters?
In our most recent health improvement programme—Andrew Walker probably has a copy of its financial schedules—the amount is £20 million.
Do you have £20 million of new money?
That question relates to the point that I made earlier. The intention is to spend £20 million on a recurring basis by the end of the year. We will not spend £20 million this year, because we will not start with all elements on 1 April. Slippage has occurred. We need to create some slippage in the system to deal with some in-house pressures, but by the end of the year, the intention is to spend £20 million on developments. That depends on our achieving all our targets.
So roughly £5 million is to cover wage increases, inflation and the costs of goods that you buy. After that, are you saying that you will have £20 million clear?
The way in which we use the existing money is changing to release money.
We intend to spend that money on developments—for example, if something is redesigned. We have quite an involved plan to try to achieve the target. That was the intention and that is the plan. It is ambitious.
A bit of old money is being shifted around as well as new money.
The thinking behind Dorothy-Grace Elder's question concerns the 5.5 per cent uplift, which is your headline figure. Once pay, inflation and other such matters are accounted for, what is a ballpark figure of the amount that you have left?
It is intended that, by the end of the year, we will have invested the equivalent of £20 million, which will come into full play next year. For example, recruiting consultant staff may take a considerable time, and you do not start to pay for them until they are in post. Once they are in post, you pay for them permanently. The £20 million of developments that will take place in cancer and stroke treatment and in primary care, for example, will not all happen on 1 April.
After all the pay awards and everything else has been dealt with, how much new money from the Scottish Executive—not reshifted money—will be available for new services?
I think that we can give the committee that information on paper, from our finance department. It would be difficult for us to give it to you.
We are happy for you to do that.
Has the introduction of three-year indicative budgets enabled the health service to adopt the spend-to-save philosophy that it was previously denied by the year-on-year budgeting process? Has that granted greater autonomy for general practitioners in prescribing high-cost drugs in the initial stages of illness, which may allow a better quality of life for patients in the long term?
The move to three-year budgets is a welcome development, as it allows us to take a long-term view. The mad March spend in the NHS has always horrified me. Moving towards three-year allocation will allow us to think a little differently. If we have three years in which to spend money, we will be able to adopt a better approach and involve the public more. It is a welcome development, and I do not think that anyone would speak against it.
Although we previously had a five-year planning process in terms of the HIP, we were constrained in what we could commit to that. For example, we were not sure whether we could start the recruitment process in December to begin the service on 1 April. Under the previous arrangements, we were not sure whether we could hold to that kind of commitment. With the projection of a three-year allocation, we are able to plan more sensibly over those three years and consider the phasing in of new services over that time scale, instead of having to jiggle it within 12 months. We also look forward to receiving the revised financial arrangements that are being developed, which should give us additional flexibility at the end of the year, so that there will not be the usual mad dash.
I was interested to hear that the three-year indicative budgets allow you to think differently. You are obviously talking about a huge spectrum of services in which you would have to think differently. Are you ensuring that individuals are thinking differently and working out what can be achieved with the money that is coming in? Have we managed to join all that up?
The question was asked whether we can deal with mental health services below health board level. We are moving towards joint commissioning boards within each of the health board areas, for example, within Argyll and Bute. There is a common understanding and the local authority knows how much it spends on in-patient care, on community mental health nurses and on drugs. A three-year planning process will allow us to make much bigger changes in the type of provision that we have. At the moment, we are stuck with paying for institutional care with 90 per cent of that money.
The most important factor, which was mentioned earlier, is that three-year budgeting gives confidence not only to managers, who can plan ahead, but to clinicians and assistants. If they see their place in the queue for money not this year but next year, they have greater confidence that their turn will come without their having to enter into the traditional shroud-waving or shouting louder than anyone else. Three-year budgeting allows them to put forward much more measured and reasonable proposals for services, which is a key benefit.
We will have to close the questioning, as we have overrun. Thank you very much for your evidence this morning.
Meeting adjourned.
On resuming—
Okay, back to work. I reconvene the meeting.
I declare an interest as a member of Unison.
I declare a similar interest as a member of Unison.
The recruitment policy has been working.
Some of us have been members of the union for more years than we would want to declare.
I welcome the representatives from Unison. You represent a work force that is incredibly important to the health service in Scotland and therefore to the members of this committee. We are here today to talk, ask questions and take evidence specifically on the budget. As I explained, we will ask questions along those lines, rather than including some of the more expansive questions that we might ask you at future meetings. We have all read your paper. I ask you to make a short introduction.
I am chair of the Unison health committee in Scotland. With me are Jim Devine, head of health for Scotland, and John Gallacher, lead officer for staff governance. I thank you for giving us the opportunity to come before the committee today. I shall leave most of the replies to my colleagues, but I shall respond when appropriate.
In your submission, you identify a number of concerns, such as pay, morale and work load. Is it possible to quantify the effect that those have on the service's ability to achieve targets?
The ethos of the Scottish health committee of Unison is equality, care, dignity and accountability, not only for the staff, but for the patients and clients to whom we provide a service. The problems that you mentioned are difficult. Our members are committed to the service, but we have major difficulties in recruiting and retaining staff for the salaries that are being paid, which start at around £4.05 an hour for the ancillary sector. Medical secretaries in Scotland are currently in dispute. The maximum salary for medical secretaries is around £12,000, although they have clear and crucial responsibilities. For example, they are essential to the Government's waiting list initiative. At any given time in North Glasgow University Hospitals NHS Trust, one in three of those posts is vacant, and it takes 20 weeks to fill the vacancy. Across Scotland, the ability to recruit and retain those staff is a major problem.
Your submission raises a number of important concerns for Unison and for anyone involved in the health sector. In questioning witnesses about the budget process, however, we are trying to elicit information about the correlation between the budget process and the national health service plan. Can you quantify more specifically how you think the budget and the plan correlate? Do you think that there are areas in the NHS plan that it will not be possible to fulfil because of what is in the budget? How will that affect your members?
In fairness to the Government, I should say that we have record investment in the Scottish health service. This year, there has been an increase of more than 6 per cent, which we welcome. However, our proposals are about improvements and that is what we want to debate with the committee. We do not want slogans or scams; we want solutions. We have major concerns about the morale of the work force and about the blame culture in the Scottish health service.
The committee has been trying to tease out what is actually new money for new developments, which is an issue that you have been emphasising. Would you like the budget document to contain figures for meeting the working time directive, which was agreed in October 1998? The directive is not new—it has not just arisen out of nowhere—so the costs that are involved should be planned costs. Would you like that to be spelt out in the budget, showing the amount that is to be used specifically to implement the working time directive? If the costs were drawn in from all areas, such as the Scottish Ambulance Service, and put into the budget, would there be greater clarity?
The health section of Unison has been debating that issue, and we are getting to the stage at which we may even want to separate the staff costs from all other costs. That would be exactly the scenario that you are painting, which would make the responsibility for staff very clear.
I am in the Manufacturing, Science, Finance union, which has been fighting for increased pay for laboratory staff. This year, we secured an 11 per cent increase, but that money cannot be used again.
Absolutely. I totally agree.
In your responses to Richard Simpson and Janis Hughes, you seemed to indicate that there should be greater central control on the money for initiatives such as the working time directive and the junior doctors' pay deal. Do you think that there is a danger that too much central control would lead to the ring fencing of funds and the cessation of the creative work that many health boards and health trusts are doing, using their flexibility to redesign services?
You mention progressive work, Margaret. You know probably better than anyone around the table the impact that Unison had on the issue of local pay bargaining. Since the reduction in the number of trusts from 47 to 28, a doctor can be in the ludicrous position of working in Monklands hospital, Law hospital and Hairmyres hospital, which are all within the same trust, on differing terms and conditions. Our submission highlights the need to consider the harmonisation of terms and conditions throughout Scotland.
How would a one-off payment make any difference to the standardisation of the terms and conditions, which would involve an annual cost?
We are concerned that the introduction of agenda for change will hit the NHS financially. If agenda for change is implemented next year, any job evaluation scheme that has been introduced anywhere will lead to an immediate 4 or 4.5 per cent increase on the pay bill, because the people who are on a higher grade but who might not meet the evaluation for that grade are given protection and those people who should be on a higher grade go on to that higher grade. It is in anticipation of that that we are suggesting that we standardise all terms and conditions throughout Scotland.
How does that correlate with the budget that we are discussing?
You are talking about the budget for 2002-03. Agenda for change is due to be operational by next April, potentially.
Potentially?
The trade unions in Scotland take the view that, if we are to implement agenda for change, it should not be phased in and we should not end up with advance trusts or hospitals. We want the whole country to adopt agenda for change simultaneously. If that does not happen, an early implementation scheme in Lanarkshire Health Board, for example, will create problems for Glasgow Health Board, Forth Valley Health Board and surrounding areas, especially with regard to staff such as physiotherapists. Scotland is far too small to have early implementation in just some areas. The whole of the country must implement agenda for change simultaneously, which is why Unison is pushing for its implementation next year.
Have you examined the budgets that are being proposed for specific health boards? As one of the local MSPs, I have been involved in the budget process in the Ayrshire and Arran Health Board area and I am aware that money has been set aside for the standardisation of terms and conditions. Given that that health board has managed to retain its flexibility as it moves towards standardisation and that there is an accountability review process, does the money have to come from the centre?
Quite rightly, you are telling us where the new money is going, but we are trying to tell you where we think difficulties will arise. Everyone, including our members, wants service delivery to improve and wants our clients to receive quality care. The difficulty is with the potential gaps in the system. You describe the situation that Ayrshire and Arran Health Board is in. We do not know about that. We have raised the issue recently through the Scottish partnership forum and through the Scottish pay reference information group, but we have not received the information from the health board that you mention.
I should perhaps have declared earlier my 10-year membership of Unison.
The vast majority of staff have received a 3.7 per cent increase.
Average earnings across Scotland have risen by 4.5 per cent in a comparable period. Would it be fair to say that health sector workers are not keeping pace with average earnings?
For the first time in three years, we have had above-inflation pay rises, which we welcome. Unison's policy, as you will be aware, is for a minimum salary of £5 an hour and we will continue to campaign for that, as we view it as a sensible investment. I spoke about medical secretaries earlier. A high turnover of such staff means that, although they are being invested in and trained to a specialist level, they are moving on to other positions in the public sector or the private sector. We need to think in the short, medium and long terms on issues such as pay.
One way to link spending with better pay and conditions would be through the accountability review process that is held by the Scottish Executive health department and the local health boards and trusts. Do you know whether any of those topics are covered under the present arrangements? Has the health department discussed including pay and conditions in future accountability reviews?
What is discussed in the accountability review meetings is kept from us. The process is almost secret; it is certainly not open and transparent. At this stage, we have partnership working in the basement but a different type of partnership working on the top floor. Our position on the accountability review is that we should wait and see. However, we do not trust the current process.
Would it make a difference if there were staff involvement in the accountability review process and if the discussions were about how this year's budget was to be spent rather than about how last year's budget was spent? Discussions about last year's budget usually take the form of having a nice cup of tea and patting everyone on the back to congratulate them on how good they have been.
Yes, that would make a difference. Since the establishment of the Scottish Parliament, the situation has improved and there is some discussion about budget allocation and spend. Historically, we had already spent the money by the time someone told us how much we were getting and we did not know whether we would find ourselves underfunded, overspent or under budget.
A lot of work is being done to deliver a new performance assessment framework in the health service. We welcome the guidance by Trevor Jones, which was published yesterday. It outlines the health service financial management framework, which in our recent experience has been a closed book and has mainly involved talks behind closed doors between the chief executives and managing directors of boards.
Your membership and the members of other organisations will obviously be involved in deciding whether the money is spent on a, b, c or d. By having such ownership, you will be able to address the issues that Mr Devine raised about which aspects of the service have a claim on funding. That will make the system much fairer. I do not think that in my lifetime we will have the money to meet all the expectations of the Scottish public.
In the context of the strategic planning of investment in services, we must also consider issues connected with terms and conditions. However, that is being put on the back burner. We need to examine the new costs associated with those issues, but that discussion is being excluded from the partnership agenda. Our membership wants us to use the partnership process to deliver real improvements in pay and conditions, but we are still being told that such improvements need to be met through efficiency savings from existing budgets. For example, at the Inverclyde royal hospital in Greenock, one group of catering staff is on bonus while another is not. It will probably cost less than £50,000 to rationalise the situation, but the trust has said that it cannot afford to do so, even though its pay bill is about £12 million. It is ridiculous to claim that that money has to be found from cuts made elsewhere. Such issues must be identified clearly and the costs of their standardisation written into the bottom line of the budget, so that year on year we know that staff costs are a given and that there are no variations between board areas and trusts.
I should declare that I am not a member of Unison.
We had guessed that.
You can get an application form afterwards.
I thought that we had a quorum at the meeting today.
I think that I am the only committee member who is not a member.
We do not want to come to the Parliament and be negative about the situation; instead, we want to establish a partnership with the Parliament and this committee, because they play a crucial role and their decisions have an impact on health service workers. The costs that you ask about will depend on the differential between what the Scottish Government allows for a pay increase and the actual pay increase. This year, that figure is about £18 million. Furthermore, the money to implement the working time directive will probably fall about £16 million short this year. We believe that on-going costs should be met.
None of us would disagree with some of your points, particularly on hospital-acquired infections, which I understand affects about 10 to 11 per cent of beds.
Did you get that message from central office this morning? You will be signing up to the Labour party as well as to Unison.
I was referring to the suggestion that had been made. However, the proposal to save money by removing private contractors from the NHS does not fit in with existing contractual arrangements.
We are not saying that PFI is always a more expensive option, but we are saying that it is a demonstrably more expensive way of building new facilities, from the very small to the very large. Did we compare like with like? If the comparison is between an apple and a pear, all we can say is that we have two different fruits. However, in this case, as we are comparing an apple with an apple, PFI is significantly more expensive. We have much evidence that the PFI schemes in Scotland are more expensive than the amount of money that we receive in revenue and capital from other sources—we would be happy to furnish the committee with that data.
Are you saying that the system for scrutinising and checking the contracts is wrong? It is supposed to save more money.
The system and the principle are wrong.
Can I ask a supplementary on that point?
Hold on a minute. I understand that the Finance Committee is undertaking a full inquiry on PFI.
Yes. That is the subject of our next inquiry.
No doubt that committee will be asking for submissions. I am sure that we will be happy to see any copies of Unison's submission on the issue.
On PFI, for the record, it would be useful if you could give us a ball-park figure for the significantly higher costs to which you refer and the implications of those higher costs for the budget. Is it fair to say that there will be a knock-on revenue cost? If so, are we talking about a knock-on effect of fewer employees or worse pay and conditions?
We are opposed to PFI because every scheme has privatised the poached staff, reduced the number of beds, cut the number of nurses and diluted the skills mix to make profit for private companies. The scheme that we have identified here was a £4 million one with a profit margin of around £200,000. It is fair to say that the profit margins of PFI schemes are, on average, around 5 per cent. The PFI strategy runs contrary to statements of the Health and Community Care Committee on ensuring that we have model employers and on creating an NHS family. We have carried out a lot of good work on partnership information network guidance, working in partnership with the Government and management on a Scottish basis.
In answer to the first question, the cost of PFI could be measured in tens of millions of pounds per annum by the time the PFI is finished. I am not an accountant; I am a charge nurse who is also involved in Unison, so I am at the sharp end and see what PFI does.
Would you support an alternative to PFI such as the Scottish Government having borrowing powers?
We welcome the fact that the Finance Committee will investigate that possibility, as we have been campaigning for it. We will make submissions stating our opposition to PFI. As we state in our paper, we are open-minded about a broad range of options, but we think that PFI is not a good option.
I have a final question, to which I hope that you will provide a brief answer. Proposal 10 of your paper is:
They have none at present. However, as John Gallacher mentioned, Trevor Jones's paper has been very helpful. John has undertaken much work on staff governance, and we are considering putting a staff member on the new, unified board. We are looking forward to being involved in the decision-making process. The Scottish Partnership Forum is a new concept in industrial relations and ways of working. Our argument has always been that economic partnership is necessary for proper partnership. Trevor Jones's paper from yesterday points us clearly in that direction, and we welcome it.
Thank you very much for your evidence.
I did not get an answer on hospital-acquired infections and the minimum standards.
We can ask for a written answer on that. The clerks will write to the witnesses with that question.
May I also have a written answer? When you were talking about PFI, you—
No, Dorothy-Grace. Mary Scanlon asked a question that was not answered, but we have now run out of time. The Finance Committee will investigate PFI in detail, with a lot more back-up from the finance side than is available to us—I mean no disrespect to Andrew Wilson. Andrew sits on the Finance Committee, and I am sure that he can ask any questions that you may have on PFI.
I shall be brief. As a reporter, I do not have a hands-on role. I shall read about your activities and report back to the Finance Committee. Richard Simpson knows what we are doing anyway. You have received a guidance note from the Finance Committee, convener. The fundamental questions are whether the health budget is adequate and whether it is being allocated properly.
I like to think that there is no limit to this committee's ambitions. Thank you for sharing that information with us. If any members of the committee want a copy of the report, they can get one from the clerks.
A significant part—about 10 per cent—of the budget that we discussed last year was the drugs budget.
There is some information on the drugs budget in the report.
The drugs budget is significant. Interestingly, the report states that, if wages are taken out of the equation, inflation in health procurement is not increasing faster than general inflation. The drugs budget may be, but overall health procurement is not. I do not know why—we have not managed to drill into that. The key finding is that health inflation in wages is far and away the most important factor. Drugs is an interesting specific aspect but, as it is such a small part of the budget, whereas wages constitute 71 per cent of the budget, we suggest that the committee should look more closely at the wage position first. Richard Simpson knows about all this, and he can feed back on the budget as well.